Are we at full employment? Here are some estimates:
figure 1: Output gaps, from CBO (blue), OECD (tan), IMF (green), Fleischman/Roberts-FRB (red), all expressed as a percentage of potential GDP. NBER-defined recession dates are shaded gray. Sources: Congressional Budget Office February 2024, OECD November 2023, IMF October 2023, Federal Reserve Bank of Atlanta Taylor Rule Effectiveness February 2024National Bureau of Economic Research.
A version of the CBO and FRB gap series provides higher frequency estimates:
figure 2: The output gap, from CBO (blue) and Fleischman/Roberts-FRB (red), is expressed as a percentage of potential GDP. NBER-defined recession peak-to-trough dates appear gray. Source: Congressional Budget Office February 2024, Federal Reserve Bank of Atlanta Taylor Rule Effectiveness February 2024National Bureau of Economic Research.
Interestingly, post-pandemic, this specific FRB metric has been higher than CBO's metric — until the fourth quarter of 2023. (Note that not all FOMC members will rely on this specific measure.)
